Cedar Rapids is a city where leaders have shown they know how to respond as storm clouds gather.
A year ago in September, when torrential rains swelled the Cedar River north of the city, local leaders marshaled resources, put out a call for allies and prepared a comprehensive community response. They had a well-crafted plan in place and skillfully carried it out. The city was spared major damage. That’s a far cry from 2008, when the city, with no playbook to guide it, struggled to respond to epic flooding.
But what happens when those storm clouds are economic?
We met with city and economic development leaders this past week to find out what is being done in response to September’s announcement that United Technologies Corp. plans to buy Rockwell Collins for $30 billion. News of the pending sale of the city’s largest employer, a business with economic, philanthropic and educational ties reaching deep into Corridor communities and institutions, has spawned considerable uncertainty and anxiety.
Cedar Rapids City Manager Jeff Pomeranz, Mayor Ron Corbett and the city’s Economic Development Manager Jasmine Almoayed met two weeks ago with Rockwell Collins President and CEO Kelly Ortberg, who is set to lead Collins Aerospace, a new business unit created by the sale.
The message? This is no disaster, and could be an opportunity.
“When we sat down with Kelly, he gave us a high degree of confidence that the commitment to employment in Cedar Rapids is very solid. And that as time moves forward, it was his hope and belief there is significant potential for increasing the number of aerospace employees in the community,” Pomeranz told us.
“We left just having a good feeling the commitment is strong to our area,” Pomeranz said.
There has been a lot of misinformation, Pomeranz contends. Cedar Rapids is not losing its largest employer. Expansion is possible. But Cedar Rapids is not in the running to become the new corporate headquarters for Connecticut-based United Technologies.
It’s still possible Cedar Rapids could become home base for the new business unit, Collins Aerospace, but officials contend it’s too soon to tell how that decision will be made. The Rockwell purchase still must cross a series of regulatory and legal hurdles.
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There has been behind-the-scenes speculation on whether or when city leaders and other regional and state officials would fly to Connecticut to meet with United Technologies leaders. City officials say Ortberg counseled them to wait.
“I think you know how aggressive we are from an economic development standpoint,” Pomeranz said. “We are not afraid to go to Connecticut. We’ve just been advised, not just to be nice, but to be strategic. This is not the right time to go.”
We’re hopeful leaders’ positive assessments are correct. But this also is not the time to sit back and wait. The stakes simply are too high.
There are, of course, the jobs, wages and economic effects. But there’s also the enormous philanthropic impact Rockwell and its employees have in the region for numerous nonprofit organizations and causes. There’s the deep imprint the company has made on local efforts to encourage diversity, science and technology education and quality of life enhancements.
“These employees are part of our community, they’re part of the Marion Mayor Nick AbouAssaly said.
Losing the presence of a corporate headquarters could profoundly affect those community ties and philanthropy. The United Technologies deal, along with the purchase of Diamond V by Cargill and Apache Inc.’s purchase by Motion Industries, have spawned uncertainty among groups that have benefited from their corporate generosity.
“There is uncertainty. There is anxiety that comes with these,” said Doug Neumann, executive director of the Cedar Rapids Metro Economic Alliance. But he contends, in all three cases, companies are being acquired because they are strong, successful and complementary to their buyers’ operations. “These are good news stories.”
But to assure the city, region and state that the Rockwell Collins purchase will be a good news story, local leaders need a strategy. Like September 2016, they need a well-crafted playbook, skillfully carried out. Because, quite simply, there are no guarantees. As the process plays out over the coming months, storm clouds could gather quickly.
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The city should marshal its resources and be ready to make the its case, especially if circumstances abruptly change. It should put out a call for allies from the region and state government to be prepared to quickly mobilize if needed. Officials should identify people who can help showcase the region and be prepared to tell our story to United Technologies. That means communicating in a compelling fashion the importance of Rockwell Collins’ deep local ties. Studying United Technologies could tell us how our local story can make it a better company.
We understand it’s early, there are sound arguments for caution and that outside factors will dictate the process. But as we’ve learned since 2008, waiting for cues from outsiders is no substitute for local preparation. September 2016 galvanized that point. We didn’t wait for the federal government to protect the city. Now is the time explore possible scenarios, weigh options and prepare.
The good news is some components of a plan are in place. And leaders need to share the story of these ongoing efforts. For example, numerous groups, organizations and institutions already are working on the region’s need for more skilled workers, a factor that could loom large in United Technology decision-making.
Local leaders are preparing to lobby the Iowa Legislature if tax reform discussions include the possibility of altering or repealing a research and development tax credit program which has benefited Rockwell Collins. Loss of the credit, leaders insist, could affect United Technology’s future expansion decisions in Cedar Rapids.
Tying these efforts and others together into a response strategy not only prepares us for today’s uncertainties but also similar circumstances in the future.
It should be a playbook that reassures residents rattled by change their leaders are doing everything possible to prepare for any economic storms that may arise, now and in the future.
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